DSCR (Debt Service Coverage Ratio) loans by that name are primarily a US product. However, Canadian conventional commercial mortgages use the same core principle — qualification based on the property's rental income rather than your personal income. In Canada, this is called the Debt Coverage Ratio (DCR). Conventional lenders such as banks, credit unions, and alternative lenders assess whether the property's Net Operating Income (NOI) can cover the mortgage payments. This calculator helps you determine your DCR using the same formula Canadian lenders use.

Most Canadian conventional commercial lenders require a DCR of 1.10 to 1.30, meaning the property's NOI must be 10-30% higher than the annual mortgage payments. Banks and credit unions typically require 1.20-1.30, while some alternative lenders may accept as low as 1.10. A higher DCR means less risk for the lender and easier approval.

DCR = Net Operating Income (NOI) / Annual Debt Service. NOI is your annual rental income minus operating expenses (property taxes, insurance, condo fees). Annual Debt Service is your total mortgage payments for the year (principal + interest). For example, if your NOI is $60,000 and your annual mortgage payment is $48,000, your DCR is 1.25.

Residential mortgages qualify you based on personal income, using GDS (Gross Debt Service) and TDS (Total Debt Service) ratios plus the mortgage stress test. Cash flow (DCR) qualification looks at the property's income instead. This is critical for portfolio investors — residential qualification gets harder with each property you add, but cash flow qualification focuses on each deal independently.

Conventional commercial mortgages with cash flow qualification are available for: multi-family properties (5+ units) from banks, credit unions, and alternative lenders, mixed-use properties, commercial real estate, and in some cases, residential portfolios of 1-4 unit properties through alternative lenders. The stronger the rental income relative to the mortgage payment, the easier it is to qualify.

This calculator is designed for Canadian conventional commercial mortgages using Canadian lending standards. For US DSCR loans — which have different requirements, rates, and terms — use our US DSCR Loan Calculator instead. US DSCR loans are available for Canadians investing in the US through foreign national programs.